Floating Rate Savings Bonds Calculator 2026 – Better Than FD?
Calculate returns from Government of India's floating rate savings bonds (currently 8.05%). Compare with bank FDs to see if this safe government bond beats your bank!
Rate resets every 6 months based on NSC rate
Key Features
- ✓ Fixed tenure: 7 years
- ✓ Interest paid semi-annually
- ✓ Rate = NSC rate + 0.35%
- ✓ No premature withdrawal
- ✓ Minimum: ₹1,000
- ✓ No maximum limit
Returns Summary
Maturity Amount (7 years)
₹1,65,744
⚠️ Note: Interest rate resets every 6 months. Actual returns may vary based on future NSC rate changes. This calculation assumes constant rate.
💰 Tax: Interest is fully taxable as per your income tax slab. No TDS deduction. Declare in ITR annually.
About RBI Floating Rate Savings Bonds (FRSB 2020)
The Reserve Bank of India (RBI) Floating Rate Savings Bonds, 2020 (Taxable) are 100% sovereign government-backed debt securities. They are one of the safest fixed-income instruments in India, offering sovereign safety with zero credit risk and returns linked to prevailing market interest rates.
How the Interest Rate Works
The interest rate on FRSB is pegged to the National Savings Certificate (NSC) rate with a spread of +0.35%. The coupon rate is reset every six months on January 1st and July 1st by the Government of India. The interest is paid out semi-annually directly into the investor's bank account on January 1st and July 1st.
FRSB vs Bank Fixed Deposits (FD)
Advantages of FRSB
- • 100% Sovereign Guarantee by Govt of India (Zero Default Risk)
- • Higher interest rate than most major bank FDs (+35 bps over NSC)
- • No upper ceiling on investment amount (unlike SCSS or POMIS)
- • Automatic semi-annual passive income stream
Key Considerations
- • 7-year lock-in period (premature exit only for senior citizens >60)
- • Interest is fully taxable as per your income tax slab
- • Bonds are non-transferable and cannot be pledged as collateral for loans
- • No cumulative option; payout is strictly semi-annual
Example Calculation (FRSB)
Scenario: Investing ₹10,00,000 (₹10 Lakhs) at 8.05% p.a. for 7 Years
- • Principal Amount: ₹10,00,000
- • Semi-Annual Interest Payout: ₹40,250 (credited twice every year)
- • Annual Income Generated: ₹80,500
- • Total Interest over 7 Years: ₹5,63,500
- • Total Return on Maturity: ₹15,63,500 (Principal ₹10L returned)
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EMI Calculator
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Frequently Asked Questions
What are Floating Rate Savings Bonds?
FRSB 2020 (Taxable) are government bonds with interest rates that reset every 6 months based on prevailing NSC rates. Current rate is NSC rate + 0.35%. They offer capital protection with market-linked returns.
What is the tenure of FRSB?
FRSB has a tenure of 7 years from the date of issue. There is no premature withdrawal facility. Interest is credited semi-annually to the investor's bank account.
Who can invest in FRSB?
Resident Indian individuals, HUF, charitable institutions, and universities can invest. NRIs are not eligible. There is no maximum age limit for investment.
What is the minimum and maximum investment?
Minimum investment is ₹1,000 with no maximum limit. Investments can be made in multiples of ₹1,000. There is no upper ceiling on investment amount.
Are FRSB returns taxable?
Yes, interest earned is fully taxable as per your income tax slab. TDS is not deducted. Interest must be declared in ITR. No tax benefits under Section 80C available.